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Thursday, June 9, 2011

Set amid tawny popcorn and soybean fields, weathered barns, and rusty silos, the Subaru of Indiana Automotive plant cuts a swath. A 3.4-million-square-foot monolith abutted by railroad tracks, SIA has a mountain of compost and the occasional coyote skittering through the surrounding 832 acres of woodland.

Step inside, though, and you'll discover why this might be the most exemplary car factory in America

In its 22-year history — a period that has spanned three recessions, a global financial crisis, massive U.S. auto bankruptcies, and the departure of Isuzu, a founding partner, from the operation — SIA has rolled out more than 3 million vehicles and has never resorted to layoffs. Instead, it's given workers a wage increase every year of its operation.

Staffers also enjoy premium-free health care, abundant overtime ($15,000 each, on average, in 2010), paid volunteer time, financial counseling, and the ability to earn a Purdue University degree on-site — all in a state that has lost 46,000 auto jobs and suffered multiple plant foreclosures in the past decade.

And the truly astonishing thing is how it achieved all this: through a relentless focus on eliminating waste. "This is not about recycling, or a nice marketing to-do," says Dean Schroeder, a management professor at Valparaiso University who has studied the plant. "This is a strict dollars-and-cents, moneymaking-and-savings calculation that also drives better safety and quality."